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US STOCKS-Nasdaq, S&P 500 fall as Amazon earnings disappoint

Fri 30th July, 2021 3:05pm
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
    * Amazon falls as sales growth slows
    * Pinterest sinks on saying U.S. user growth stalling
    * U.S. consumer spending rises in June, inflation increases
    * Indexes off: S&P 0.35%, Nasdaq 0.71%, Dow 0.08%

 (Updates to open)
    By Sagarika Jaisinghani
    July 30 (Reuters) - The Nasdaq and S&P 500 indexes fell on
Friday following a glum quarterly earnings report from
Amazon.com, while data showing a strong rise in June consumer
spending reinforced optimism about a steady economic rebound.
    Amazon.com Inc  AMZN.O  sank 7.1%, tracking its worst day
since March 2020, after the company said sales growth would slow
in the next few quarters as customers ventured more outside the
home.  urn:newsml:reuters.com:*:nL4N2P53XQ
    Shares of other technology behemoths, including Apple Inc
 AAPL.O , Google-parent Alphabet Inc  GOOGL.O , and Facebook Inc
 FB.O , which benefited last year from people staying indoors
due to COVID-19 curbs, fell between 0.6% and 1.8%.
    "Expectations across the board were quite high for corporate
earnings and the reason we are seeing some of the shares drop
despite positive results is because people expect exponential
growth, which to be honest is too high to expect," said Randy
Frederick, managing director of trading and derivatives at
Charles Schwab.
    Hopes of a steady post-pandemic rebound in the U.S. economy
have lifted Wall Street's main indexes to record highs and put
the benchmark S&P 500  .SPX  on course for its sixth straight
monthly gain, but the rapid spread of the Delta variant and
rising inflation have kept sentiment in check.  urn:newsml:reuters.com:*:nL1N2P52X7
    Data on Friday showed U.S. consumer spending rose more than
expected in June, but part of the increase reflected higher
prices, with annual inflation accelerating further above the
Federal Reserve's 2% target.  urn:newsml:reuters.com:*:nL1N2P52DB
    "People were obviously worried last night with Amazon
missing on the top line (estimates), but the spending is still
there, it has just transferred from spending online to more
experiential services," said Thomas Hayes, managing member at
Great Hill Capital LLC in New York.
    "It shows that consumers are spending their money and not
hoarding it as they would do if they were worried about economic
prospects."
    Earlier this week, the Fed reiterated its view that higher
inflation would be transient.
    By 9:46 a.m. ET, the S&P 500  .SPX  was down 0.35%, the
Nasdaq Composite  .IXIC  was down 0.71% and the Dow Jones
Industrial Average  .DJI  was down 0.08%.
    The S&P real estate  .SPLRCR , utilities  .SPLRCU  and
consumer staples  .SPLRCS  indexes - commonly considered
defensive plays - were among the biggest gainers in morning
trading.
    Pinterest Inc  PINS.N  plunged 17.4% to its lowest in more
than two months after saying U.S. user growth was decelerating
as people who used the platform for crafts and DIY projects
during the height of the pandemic were stepping out more.
 urn:newsml:reuters.com:*:nL4N2P53YE
    Caterpillar Inc  CAT.N  reversed course to fall 3.3%. The
company posted a rise in second-quarter adjusted profit on the
back of a recovery in global economic activity.  urn:newsml:reuters.com:*:nL4N2P62GU
    Overall, second-quarter results have come in from about half
of the S&P 500 companies, of which nearly 91% have beaten profit
estimates, according to Refinitiv data.
    Advancing issues outnumbered decliners 1.13-to-1 on the NYSE
and 1.11-to-1 on the Nasdaq.
    The S&P index recorded 40 new 52-week highs and one new low,
while the Nasdaq recorded 35 new highs and 30 new lows.

 (Reporting by Sagarika Jaisinghani, Shashank Nayar and
Shreyashi Sanyal in Bengaluru; editing by Uttaresh.V and Aditya
Soni)
 ((sagarika.jaisinghani@thomsonreuters.com;))
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